The True Cost of Expedia Travel Ads: How Hotels Sacrifice Direct Revenue

Gourmet Marketing is a hotel advertising agency that helps independent hotels increase direct revenue. This Expedia Travel Ads analysis demonstrates our data-driven approach to evaluating media strategies that influence profitability and long-term brand success.

Expedia Travel Ads are promoted as a powerful way for hotels to increase visibility, attract bookings, and boost revenue through the Expedia platform. The idea is straightforward: spend money to make money. However, when you consider the ad costs, the 20% plus commission fees, and the lack of guest data, the actual return becomes much less clear.

At Gourmet Marketing, we've spent a lot of time trying to figure out if Expedia Travel Ads actually help or hurt hotels trying to increase direct bookings. This is a crucial question since everything we do is focused on generating direct revenue through hotel websites. Does paying to boost your listing on an OTA undermine your long-term digital strategy?

Over the past two years, we have had the chance to examine Expedia Travel Ads with a select group of hotel clients who chose to use the platform. Although not widely adopted across our portfolio, these cases provided us with a controlled view of how Travel Ads impacted our direct business, especially during times when hotels needed more visibility or aimed to boost short-term bookings. Every time a hotel launched Expedia Travel Ads, we monitored changes across multiple platforms: Google Ads, Google Analytics, Hotel Metrics (our booking engine analytics software), and Google Hotel Finder data.

The Upside: What Expedia Travel Ads Can Do Well

Before exploring the risks and case study data, it’s important to understand that Expedia Travel Ads offer real benefits, especially when used appropriately. When applied with clear intent and a well-managed strategy, they can greatly improve a hotel’s short-term results.

1. Top Placement in Search Results
   Travel Ads allow hotels to secure premium visibility in high-traffic search results on Expedia and Hotels.com. This placement can put independent hotels or underperforming listings ahead of better-ranked competitors.
   
   
2. Audience Targeting Capabilities
   Ads can be targeted based on stay dates, booking windows, length of stay, geography, etc.  Giving hotels the flexibility to shape campaigns around their revenue.
   
   
3. Pay-Per-Click (PPC) Model
   Hotels only pay when a user clicks, meaning the budget is directly linked to engagement instead of impressions. In certain situations, this can be more cost-effective than CPM (cost per thousand) models.
   
   
4. Rapid Deployment for Tactical Needs
   Travel ads can be activated quickly during times of need, such as low occupancy periods, soft shoulder seasons, or last-minute gaps. This makes them a flexible tool for short-term revenue management.
   
   
5. OTA Ecosystem Leverage
   Expedia’s reach is extensive, and Travel Ads integrate directly into their network of brands and affiliate sites. Hotels can reach a worldwide audience without needing to run separate campaigns across different channels.

Negatives / Risks of Expedia Travel Ads

Although Expedia Travel Ads might appear to be a quick way to boost bookings, the actual story is more complex. Under the surface, there are hidden costs, including commission erosion, reporting blind spots, and long-term dependency risks that aren't reflected in the initial numbers.

1. Rising Costs & Higher CPCs
   Expedia Travel Ads used to be a cheap option, but that’s no longer the case. Minimum bids and CPCs have gone up, making it more costly to stay visible, often for bookings that could be secured directly at a lower price.
   
   

2. Limited Reporting
   Expedia's reporting is basic. You get impressions, clicks, and bookings inside its platform, but there’s no visibility into cross-channel impact, multi-touch attribution, or what was cannibalized from direct bookings.
   
   

3. Attribution Bias
   Expedia uses last-click attribution, taking full credit for the booking even if the customer already searched for the hotel or visited the website directly. This inflates perceived performance and masks what marketing channels actually drove the demand.
   
   

4. Loss of Guest Data
   When a booking is made through Expedia, the hotel does not receive complete guest information. This limits opportunities for post-stay marketing, upselling, loyalty programs, and building long-term customer relationships.
   
   
5. Margin Compression
   Hotels spend on advertising and a commission, often over 20 percent, for each booking. The actual cost of acquiring a customer is much higher than what Expedia reports, especially when bookings are not incremental.
   
   
6. Cannibalization of Direct Bookings
   Many bookings made through Expedia Travel Ads could have been made directly on the hotel’s own website. Essentially, the hotel pays Expedia to claim credit for demand it has already created through other channels.
   
   
7. Loss of Brand Control
   Expedia and its partners frequently bid on hotel brand terms in Google Ads. This not only causes hotels to lose traffic from brand searches but also occasionally results in being outbid on their own name by the same platform they’re paying to advertise on.
   
   
8. Increased Operational Overhead
   Running travel ads requires continuous monitoring, cross-platform audits, and manual troubleshooting, especially when ads begin affecting branded traffic or conversion rates elsewhere. This can cause significant strain on lean marketing teams.
   
   
9. Misleading ROI Perception
   Published case studies, especially those from Expedia, often highlight impressive returns from Travel Ads. However, these metrics are usually incomplete. They don’t include OTA commissions, fail to account for bookings that would have happened organically, and ignore the cross-channel costs of cannibalizing direct demand. Because Expedia’s reporting lacks full attribution visibility or any measure of long-term guest value, hotels are left with a narrow view of ROI that can significantly overstate the benefit. And that’s the real risk: decisions based on incomplete data can lead to investments that seem beneficial on paper but quietly erode profitability over time.

What We Found: Key Patterns in the Data

Over the past two years, we’ve tracked a select group of Gourmet Marketing clients who launched Expedia Travel Ads. Although adoption has been limited, this has allowed us to accurately monitor the effects across campaigns using Google Ads, Google Analytics, Hotel Metrics (our booking engine analytics platform), and Google Hotel Finder data.

1. Expedia’s Presence in Google Ads Increased
   Across the board, once Expedia Travel Ads were activated, we saw a measurable increase in Expedia’s presence within the hotel’s brand campaigns in Google Ads. Specifically, Expedia.com and Hotels.com began appearing more frequently in the auction insights, with a higher impression share.
   
   

   Impression Share indicates the percentage of times an advertiser’s ad is shown out of all the times it was eligible to appear. For example, if Expedia is eligible to show for 1000 branded searches and appears 400 times, its impression share is 40%. The higher the impression share, the more visibility Expedia gains — often at the expense of the hotel’s own ads.

   The pattern wasn’t consistent in magnitude; results varied by season, market, and competition. However, the overall trend was clear: when hotels paid for advertising on Expedia, Expedia became more competitive on Google Ads for that hotel’s brand terms.
   
   
2. Aggressive Brand Bidding by Expedia Drove Up Costs and Losses
   All of the brand campaigns we tracked, Expedia started showing up more often in the top spot on Google search results, beating out the hotel’s own branded ads, after Travel Ads were rolled out.
   
   We monitor this using a key Google Ads metric called absolute top impression share. This metric shows how often a competitor’s ad appears in the top paid spot, above all other ads on the page. While impression share indicates how often a competitor participates in your brand auctions, absolute top share shows how aggressively they’re bidding to dominate the most valuable spot.
   
   In some hotels, Expedia’s absolute top impression share jumped from 5–10% to over 20-30% after turning on Travel Ads. When Expedia wins that top spot, the consequences go far beyond losing visibility. Here’s what we consistently observed:
   
   
   • Cost-per-click (CPC) increased significantly as hotels struggled to stay visible under their names.
   • Budgets depleted quickly, resulting in shorter campaign durations or reduced reach.
   • Direct bookings were lost to Expedia as brand campaign performance weakened.
   • Hotels paid twice: once for Travel Ads and again for higher brand campaign costs.
   
   Expedia's behavior has grown increasingly aggressive in recent quarters. When the market is weak, marked by lower occupancy and reduced travel demand, Expedia steps up the pressure. That’s when their market share surges to the top, and hotels with tighter marketing budgets lose control of branded traffic. In fact, hotels with fewer than 60 rooms saw the steepest rise in CPC and the sharpest drop in booking efficiency.

Case Study

This case study analyzes the impact of Expedia Travel Ads on the performance of a 24-room independent luxury hotel over an eight-month period in 2025. With consistent historical results and a strong 10:1+ ROAS on branded search, the hotel served as an ideal control group to understand the true cost of running paid OTA campaigns.

The study examines the period from April to July 2025, when the hotel decreased its Google Ads brand budget and simultaneously introduced Expedia Travel Ads. The analysis utilizes data from Google Ads, Expedia platform reports, and Hotel Metrics to track how paid OTA presence influences visibility, ROAS, and direct bookings.

Context & Setup

While the hotel enjoys solid performance most of the year, summers tend to be seasonally soft.  Historically, it maintained:

• Over 10:1 ROAS on branded search

• Strong revenue from Direct, Organic, Local, and Metasearch

• Steady performance across all digital channels

In March 2025, two key changes were made:

1. Google Ads brand budget was cut from $6,600 to $4,800/month

2. Expedia Travel Ads launched, spending $1,000/month

This period also saw increased competition on brand keywords and higher CPCs across the industry.

Timeline of Key Events